Before the Royalties Roll In, Creators Reach for Credit Cards and Crowdfunding
PORTLAND, Ore. (Nov. 12, 2026) — Credit cards and crowdfunding help independent filmmakers, musicians, authors, and game developers finance projects that conventional lenders struggle to support, according to a new white paper published today by the International Center for Law & Economics (ICLE).
Author Julian Morris, a senior scholar at ICLE, finds that these funding sources often work together, enabling creators to begin production, test audience demand, and cover expenses before revenue arrives.
The financing challenge begins with uncertainty, Morris writes. Creators must spend money before they know whether audiences will pay for their work. An unfinished film or recording offers little security for a loan, and creators often earn low, irregular incomes. Studios, record labels, and publishers traditionally addressed these problems by financing many projects and spreading the risk across them. But that also gave those firms considerable control over which works reached audiences.
For creators working without that backing, credit cards offer another route.
“A credit card gets around both problems by lending to the person rather than to the project,” Morris writes. “For a filmmaker or musician with few assets and an uncertain income, a card is often the most accessible source of startup financing.”
Card issuers assess borrowers’ credit histories rather than a film’s potential audience or an album’s likely sales, Morris explains. Creators can use available credit to start production or meet unexpected expenses without negotiating a separate loan for each purchase. They remain responsible for repayment even if the project fails.
Morris’s case studies of 24 prominent directors’ early films and filmmaking careers illustrate that tradeoff. He documents frequent reliance on savings, family, friends, deferred wages, and credit cards, with cards appearing in half the cases. Kevin Smith’s “Clerks” and Justin Lin’s “Better Luck Tomorrow” relied principally on card borrowing. Morris cautions that the sample illustrates financing practices rather than measuring how often card-financed projects succeed.
Digital technology has made such financing more feasible by lowering production and distribution costs, Morris writes. Yet streaming and subscription services often pay creators gradually, making it harder to repay production debt with a single sale.
“A filmmaker expecting to sell a finished film to a distributor might use a credit card to bridge the gap until that payment arrives. A filmmaker expecting a gradual flow of YouTube revenue may be willing to borrow much less,” Morris writes.
Crowdfunding offers a complementary source of funding, Morris explains. Audience pledges provide early evidence of demand, and successful campaigns can repay development debt. Cards, in turn, can cover campaign preparation, overruns, and short-term expenses, while also processing backers’ pledges.
Specialized financing against established royalty streams provides another option, Morris finds. But these products generally require demonstrated earnings, leaving newcomers more dependent on personal credit and audience support. Cheaper technology has expanded their opportunities without eliminating the need to finance work before audiences pay.
“Distributors spread risk, crowdfunding tests demand, and cards provide flexible funding without project collateral. Card-payment systems also connect creators to the backers and subscribers who support them,” Morris concludes. “Together, these options give more creators a chance to produce work whose audience—and value—has yet to emerge.”
The full white paper can be downloaded here. To arrange an interview with Morris, contact Jim Fellinger at [email protected].
About ICLE
The International Center for Law & Economics (ICLE) is a nonprofit, nonpartisan research center working with a roster of more than one-hundred academic affiliates and research centers from around the globe. ICLE scholars promote the use of law and economics methodologies to inform public policy debates. For more information, visit laweconcenter.org.